Crex Co was set up by Cynthia Rex who created her own brand of chalk paint 20 years ago. Using her background in fine art, she developed this specialist chalk paint to be used in the restoration of furniture and to decorate accessories. The chalk paints are exclusively available through Crex Co's network of over 800 independent stockists who are located in over 30 countries around the world.
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- KAM Limited manufactures two type of machine: Agro and Farm. The weekly production is 1,500 units of Agro and 1,000 units of Farm. The products are made in batches, before a batch can be made the production machinery must be set-up, checked for accuracy. Each batch produced has quality inspection to ensure that it is of the required standard. The following are the details of each product: Agro Farm Units produced in one batch 500 units 250 units Selling price per unit £200 £160 Direct materials per unit £60 £40 Direct labour per unit (one hour per unit) £20 £20 The following are the fixed production costs each week: Set-up costs of machinery £28,000 Quality inspection costs of production £14,000 Currently the company uses absorption costing. Fixed production costs are attributed to output on the basis of direct labour hours. The management is considering activity-based costing approach. You are required to: Calculate…KAM Limited manufactures two type of machine: Agro and Farm. The weekly production is 1,500 units of Agro and 1,000 units of Farm. The products are made in batches, before a batch can be made the production machinery must be set-up, checked for accuracy. Each batch produced has quality inspection to ensure that it is of the required standard. The following are the details of each product: Agro 500 units Farm 250 units Units produced in one batch Selling price per unit Direct materials per unit Direct labour per unit (one hour per unit) £200 £160 £60 £40 £20 £20 + The following are the fixed production costs each week: Set-up costs of machinery Quality inspection costs of production £28,000 £14,000 Currently the company uses absorption costing. Fixed production costs are attributed to output on the basis of direct labour hours. The management is considering activity-based costing approach. You are required to: a) Calculate the overheads attributed to Agro and Farm each week through…John Patrick has recently been hired as controller of Valdosta Vinyl Company (VVC), a manufacturer of vinyl siding used in residential construction. VVC has been in the vinyl siding business form any year sand is currently investigating ways to modernize its manufacturing process. At the first staff meeting Patrick attended, Jack Kielshesky , chief engineer, presented a proposal for automating the Molding Department. Kielshesky recommended that the company purchase two robots that would have the capability of replacing the eight direct-labor employees in the department. The cost savings outlined in the proposal include the elimination of direct-labor cost in the Molding Department plus a reduction of manufacturing overhead cost in the department to zero, because VVC charges manufacturing overhead on the basis of direct-labor dollars using a plant wide rate. The president of VVC was puzzled by Kielshesky's explanation: “This just doesn't make any sense. How can a department’s overhead…
- Vernon Inc. has analyzed the setup time on its computer-controlled lathe. The setup requireschanging the type of fixture that holds a part. The average setup time has been 140 minutes,consisting of the following steps: Turn off machine and remove fixture from lathe 15 minutesGo to tool room with fixture 15Record replacement of fixture to tool room 18Return to lathe 20Clean lathe 20Return to tool room 20Record withdrawal of new fixture from tool room 12Return to lathe 15Install new fixture and turn on machine 5Total setup time 140 minutesa. Why should management be concerned about improving setup time?b. What do you recommend to Vernon Inc. for improving setup time?c. How much time would be required for a setup, using your suggestion in (b)?Chilton Peripherals manufactures printers, scanners, and other computer peripheral equipment. In the past, thecompany purchased equipment used in manufacturing from an outside vendor. In March 2018, Chilton decidedto design and build equipment to replace some obsolete equipment. A section of the manufacturing plant was setaside to develop and produce the equipment. Additional personnel were hired for the project. The equipment wascompleted and ready for use in September.Required:1. In general, what costs should be capitalized for a self-constructed asset?2. Discuss two alternatives for the inclusion of overhead costs in the cost of the equipment constructed by Chilton. Which alternative is generally accepted for financial reporting purposes?3. Under what circumstance(s) would interest be included in the cost of the equipment?Heavenly Chocolates manufactures and sells quality chocolate products at its plant and retail store located in Saratoga Springs, New York. Two years ago, the company developed a web site and began selling its products over the Internet. Web-site sales have exceeded the company’s expectations, and management is now considering strategies to increase sales even further. To learn more about the web-site customers, a sample of 50 Heavenly Chocolate transactions was selected from the previous month’s sales. Data showing the day of the week each transaction was made, the type of browser the customer used, the time spent on the web site, the number of web pages viewed, and the amount spent by each of the 50 customers are contained in the file named Heavenly Chocolates. A portion of the data is shown in the table that follows: Heavenly Chocolates would like to use the sample data to determine whether online shoppers who spend more time and view more pages also spend more money during their visit to the web site. The company would also like to investigate the effect that the day of the week and the type of browser have on sales. Managerial Report Use the methods of descriptive statistics to learn about the customers who visit the Heavenly Chocolates web site. Include the following in your report. Graphical and numerical summaries for the length of time the shopper spends on the web site, the number of pages viewed, and the mean amount spent per transaction. Discuss what you learn about Heavenly Chocolates’ online shoppers from these numerical summaries. Summarize the frequency, the total dollars spent, and the mean amount spent per transaction for each day of week. Discuss the observations you can make about Heavenly Chocolates’ business based on the day of the week? Summarize the frequency, the total dollars spent, and the mean amount spent per transaction for each type of browser. Discuss the observations you can make about Heavenly Chocolates’ business based on the type of browser? Develop a scatter diagram, and compute the sample correlation coefficient to explore the relationship between the time spent on the web site and the dollar amount spent. Use the horizontal axis for the time spent on the web site. Discuss your findings. Develop a scatter diagram, and compute the sample correlation coefficient to explore the relationship between the number of web pages viewed and the amount spent. Use the horizontal axis for the number of web pages viewed. Discuss your findings. Develop a scatter diagram, and compute the sample correlation coefficient to explore the relationship between the time spent on the web site and the number of pages viewed. Use the horizontal axis to represent the number of pages viewed. Discuss your findings.
- Stefan Ceramics is in the business of selling ceramic vases. It has two departments – molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it as per the requirement of the customers. During the month of July, molding department purchased 720 kgs of tungsten carbide at $280 per kg. It started manufacture of 4200 vases and completed and transferred 3200 vases during the month. It has 1000 vases in the process at the end of the month. It incurred direct labor charges of $1900 and other manufacturing costs of $500, which included electricity costs of $900. Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 45% complete in respect of conversion costs. Required: What is the cost of tungsten carbide that will be assigned to vases finished and transferred to the finishing…Best Ink produces printers for personal computers. The following information is available for production of a recent order of 500 printers. Process time 16.0 hours Inspection time 3.5 hours Move time 9.0 hours Wait time 21.5 hours 1. Compute the company’s manufacturing cycle time. 2. Compute the company’s manufacturing cycle efficiency. 3. Assume the company wishes to increase its manufacturing cycle efficiency to 0.80. If process time is unchanged, what is the maximum number of hours of non-value-added time the company can have and meet this goal?. Louisville Sports manufactures baseball bats for use by players in the major leagues. A critical requirement for elite players is that each bat they use have an identical look and feel. As a result, Louisville uses a dedicated process to produce bats to each player’s specifications. One of Louisville’s key clients is Ryan Brown of the Green Bay Brewers. Producing his bat involves the use of three materials—ash, cork, and ink—and a sequence of 20 standardized steps. Materials are added as follows: Ash: This is the basic wood used in bats. Eighty percent of the ash content is added at the start of the process; the rest is added at the start of the 16th step of the process. Cork: This is inserted into the bat in order to increase Ryan’s bat speed. Half of the cork is introduced at the beginning of the seventh step of the process; the rest is added at the beginning of the 14th step. Ink: This is used to stamp Ryan’s name on the finished bat and is added at the end of the process. Of the…
- Jobs, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 20,000 Tri-Robos is as follows. Cost Direct materials ($50 per robot) $1,000,000 Direct labor ($40 per robot) 800,000 Variable overhead ($6 per robot) 120,000 Allocated fixed overhead ($30 per robot) 600,000 Total $2,520,000 Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $115 per unit or $2,300,000.Following are independent assumptions. (A2) Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Jobs can use the released productive resources to generate additional income of $375,000. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).). Louisville Sports manufactures baseball bats for use by players in the major leagues. A critical requirement for elite players is that each bat they use have an identical look and feel. As a result, Louisville uses a dedicated process to produce bats to each player’s specifications. One of Louisville’s key clients is Ryan Brown of the Green Bay Brewers. Producing his bat involves the use of three materials—ash, cork, and ink—and a sequence of 20 standardized steps. Materials are added as follows: Ash: This is the basic wood used in bats. Eighty percent of the ash content is added at the start of the process; the rest is added at the start of the 16th step of the process. Cork: This is inserted into the bat in order to increase Ryan’s bat speed. Half of the cork is introduced at the beginning of the seventh step of the process; the rest is added at the beginning of the 14th step. Ink: This is used to stamp Ryan’s name on the finished bat and is added at the end of the process. Of the…Recently, Mewah Designs expanded its market by becoming an original equipment supplier toJee Wrangler. Mewah Designs produces factory upgraded speakers specifically for JeeWrangler. The Kicker components and speaker cabinets are outsourced with assemblyremaining in-house. Mewah Designs assemble the product by placing the speakers and othercomponents in cabinets that define an audio package upgrade and that can be placed into theJee Wrangler, producing the desired factory-installed appearance. Speaker cabinets andassociated Kicker components are added at the beginning of the assembly process.Assume that Mewah Designs uses the weighted-average method to cost out the audio package.The following are cost and production data for the assembly process for April: Production:Units in process, April 1, 60% complete 60,000Units completed and transferred out 150,000Units in process, April 30, 20% complete 30,000Costs:WIP, April 1:Cabinets RM 1,200,000Kicker components RM 12,600,000Conversion costs…